Gregory Plotko discusses Toys "R" Us liquidation with Bloomberg

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March 8, 2018

Toys "R" Us Inc. is making preparations for a liquidation of its bankruptcy U.S. operations after so far failing to find a buyer or reach a debt restructuring deal with lenders. The toy chain’s U.S. division entered bankruptcy in September, planning to emerge with a leaner business model and more manageable debt. A new $3.1 billion loan was obtained to keep the stores open during the turnaround effort, but results worsened more than expected during the holidays, casting doubt on the chain’s viability.

RK&O partner Gregory G. Plotko spoke with Bloomberg on why he thinks the chain has failed to find a buyer, “my sense is that the major creditor group has not yet heard a compelling enough story, nor has a ‘white knight’ appeared.” He also added that while Chapter 11 bankruptcy allows companies "breathing space", it is crucial that the debtors' management show how it plans to reorganize.

"Toys 'R' Us Is Prepping to Liquidate Its U.S. Operations" (Bloomberg)